Maximizing Revenue For RM

Posted on 3/3/2008 by Jim Pickerell | Printable Version | Comments (0)

Many image sellers believe the ability to license exclusives is RM's principle distinguishing characteristic. Previously, I've explained why I think basing "usage on price" is more important than being able to sell exclusives. I've also pointed out that RF and microstock models license exclusives by removing images from their database. (Yes, previous RF purchasers have a continuing right to use the images they've purchased, but these users and their business types can be identified. Customers tend to be less concerned about past uses than they are about future unknown uses.)

The primary reason for offering images as RM rather than RF is the hope of earning tens of thousands of dollars from a single sale. But the number of such sales is infinitesimal. And given the huge number of RM images available for licensing compared to RF, the chances of making such an RM sale is much less than if the image was offered as RF. Currently, many of the industry's top earning photographers make a significant portion, if not all, of their income from RF, not RM. Holding images aside so they can be licensed for exclusives dramatically limits the possibilities of licensing them at all. Consequently, the existing RM business model needs re-examination.

New Business Model

Stock image sellers should consider whether it's better to have two separate types of RM images. RM in this case means "licensing based on usage" and says nothing about whether the image is available for exclusive licensing. The two divisions of RM would be Rights Managed Non-Exclusive (RMN-E) and Rights Managed Exclusive (RME).

The majority of sellers would want to offer their images as RMN-E with no guarantee an image would be available for exclusive licensing. In some cases, it would be possible to license exclusive rights to such images, if the producer and the buyer could agree on a price.

Does It Make Sense?

The first step is to carefully examine past sales and determine the percentage of total revenue coming from exclusive licenses. My guess is most sellers will find less than 5% of revenue comes from exclusives. Many of these sales could still have been made, even if the image was offered as RMN-E, provided the buyer was not concerned about previous use and there was time to remove the image from other collections. Calculate the revenue lost if you had no RME images to offer and all your images were RMN-E. In today's market, most sellers will be able to make up for lost RME revenue by adopting an RMN-E strategy and opening up new markets.

1 - Once the RMN-E principle is recognized, it becomes easier to move images into a Rights Ready (RR) environment and sell them as both RMN-E and RR. Offer an RR price for unlimited uses, but also provide small users with an RMN-E option, making it possible for them to negotiate a better price for minimal use of the image.

2 - It becomes much easier to define certain small uses that can be licensed for lower prices. This can open up new markets that RM sellers have not addressed.

3 - A major advantage to image creators is that non-exclusive images can be placed on many portals, just like RF. Creators are no longer restricted to working with one seller. There is no single portal, not even Getty Images, where all customers go. Customers choose different portals for different reasons, even when the same images are available on all. Therefore, it is best for the image creator to have all his images in as many venues as possible. Some venues may accept more variations that others. In each collection, the images may appear in a different search-return-order, increasing their chance of being seen in one collection over another. Some collections have a very tight editing strategy. Others offer a broader, more eclectic selection. Having the same images represented on a variety of portals can help image producers earn more revenue. Ever increasing revenue tends to insure a continued stream of new images.

4 - Making it as easy to offer RMN-E images to multiple distributors as RF would enable RM seller to better compete with RF. A huge percentage of RM images are unlikely to ever be licensed for exclusive use, given their subject matter and style. Their distribution is restricted because the seller wants to license them based on use rather than file size.

5 - In some cases, an image is so unique and has the potential to earn so much money from exclusive sales that it's in the best interest of the photographer to continue to market it as RME. There's nothing wrong with that, but don't lock up all RM images in this way. Photographers should have the option to decide whether the image should be licensed as RMN-E or RME.

Virtually all portals offer RF as well as RM. Maybe it's time to maintain a very limited selection as RME and turn most RM images into RMN-E's. It's not hard to code images as: RME, RMN-E, RR and RF as a way of explaining how each one is licensed.

 


Copyright © 2008 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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